MODUN RESOURCES INFORMS MARCH 2014 QUARTERLY REPORT

Ulaanbaatar /MONTSAME/ Modun Resources operating in the Nuurst Thermal Coal project in 120 km southeast of Ulaanbaatar has released March 2014 quarterly report. The report was published at asx.com.au website on April 30. Highlights of the report are placement to sophisticated investors raising $510,000; corporate restructure to reduce costs; ongoing discussions with local partners to invest in the Nuurst Project; approval of Mongolian feasibility study on the Nuurst Project by Mineral Resources Authority of Mongolia (MRAM) On 18 March 2014, Modun completed a placement to sophisticated investors raising $510,000 via the issue of 255m shares at a placement price of 0.2c, the report says. Funds have been received for $310,000 with the balance of $200,000 being issued to family interests associated with a director, Hugh Warner, which is subject to shareholder approval at a General Meeting. At the end of the quarter, Modun has total cash reserves of $0.38 million with an additional $0.2 million due to be received at the end of May 2014, subject to shareholder approval. During the quarter, Modun implemented a substantial cost reduction programme aimed at reducing costs across the company and included a reduction in staff levels, the termination of all contractors and a significant reduction in employee salaries across the whole company, the report informs. The primary focus for Modun has been to source a local partner to help fund the development of the Nuurst Project. The work associated with completing the bankable feasibility study or any other work required to advance the project was suspended during the quarter until a suitable funding partner has been found. Discussions with the Mongolian Government for the Off-take Agreement also continued during the quarter, however the timing for the Government to sign an agreement remains uncertain. The Mongolian feasibility study for the Nuurst Project was successfully approved by MRAM in January 2014, the report says. This is an important part of the process in Mongolia because MRAM will only issue their approval for a Mongolian feasibility study if they believe the deposit is economically viable and sustainable. The Mongolian feasibility study was independently prepared by Absolute Mining LLC who has a strong knowledge of local conditions and costs. The study identified the potential for a 136.9Mt mine of sub-bituminous thermal coal over a 30 year mining operation, with production ramping up to 4.9Mt of raw coal per annum and 500Kt of dried coal briquettes by the 4th year of operation. Indicative production costs are estimated at $US11.50 per ton for raw coal over the life of the mine, at today’s costs, reflecting the low overall mining ROM strip ratio of 2.4:1. About Modun Resources Limited ASX-listed Modun Resources (ASX: MOU) is developing the 100%-owned Nuurst Coal Project in central Mongolia. Nuurst is a thermal coal project, which encompasses a 2,497 hectare Mining Licence area. In November 2012, Modun announced a 478 million tonne JORC Code 2004 reported Coal Resource at Nuurst (326 million tonnes Measured, 104 million tones Indicated, 48 million tons Inferred). The Nuurst Coal Project is located 120 kilometres south of Mongolia's capital Ulaanbaatar and six kilometers from existing rail infrastructure which links directly into China.